Same-day Air Delivery Flies Higher with 5G
I spoke earlier this week about how 5G can save lives. But we don’t have to be in a life-or-death situation like a wildfire or surgery to benefit from next-generation wireless technology. Super-fast 5G networks can also revolutionize our lives in other ways.
For example, we’ve all become incredibly dependent on online shopping. More than that, Amazon.com (AMZN) has trained us to expect free expedited shipping. Super-low shipping costs have allowed Amazon to beat out much of their competition.
And here’s how it plans to use 5G to keep sharpening that edge …
The Seattle, Wash., e-commerce giant spent $27.7 billion on shipping costs in 2018, and another $34 billion on fulfillment costs. The latter includes costs of operating/staffing of fulfillment centers, customer service centers, and payment processing costs.
Eating the shipping costs allows Prime members to receive their purchases quickly for free. A perk billions of users constantly return … and spend their money … for.
But Amazon isn’t done revolutionizing its industry. In 2016, it revealed its next big upgrade: Prime Air. Prime members who live within 10 miles of an Amazon distribution center can receive their packages in less than half an hour, via drone delivery.
The drones used are the latest in over 50,000 iterations and can carry packages of up to five pounds. According to Jeff Bezos, 86% of items ordered on Amazon weigh five pounds or less, so the majority of purchased would be available for Prime Air.
The best part is the cost to the company. An analysis by ARK Invest concluded that once fully functional, Prime Air could deliver those packages for 88 cents per delivery.
Compare that with the current average cost of $6.45 for commercial priority mail. That’s a lot of savings.
|The Amazon.com Inc. Prime Air octocopter is seen at an undisclosed location. Source: Amazon.com Inc. via Bloomberg|
CEO of Amazon Worldwide Consumer Jeff Wilke said:
“We’ve been hard at work building fully electric drones that can fly up to 15 miles and deliver packages under five pounds to customers in less than 30 minutes. And, with the help of our world-class fulfillment and delivery network, we expect to scale Prime Air both quickly and efficiently, delivering packages via drone to customers within months.”
And here’s where the potential of 5G comes in …
Currently, drones are limited to a short distance because that’s the limit of the networks supporting them. For Prime Air to be successful, Amazon would have to manage tens of thousands of drones flying at the same time under a wide variety of conditions.
One solution would be service points along flight paths, which don’t currently exist. But 5G, a technological advancement that needs its own new infrastructure, could help with that. Unbelievably fast speeds and no latency means that the network could support an army of drones.
And Amazon isn’t the only company who sees the potential.
- Microsoft (MSFT) has done drone delivery trials in North Carolina and Kansas.
- Uber (UBER) announced plans to include drones in its food delivery service.
- FedEx (FDX) and UPS (UPS) are also determined to get into the drone game, too.
A report by PricewaterhouseCoopers projects that the commercial drone industry will be worth $127 billion by 2020.
5G and its near-limitless possibilities are only going to push this trend higher.
Get ready for companies like these to really take flight.
Stay tuned to this space for more opportunities just like them.
Jon D. Markman